Seaway Logistics company to pay KRA over sh1 million tax on stolen BMW

A clearing and forwarding company linked to businessman Babu Joshua, Seaways Kenya Ltd, has found itself entangled in a Sh1 million tax dispute with the Kenya Revenue Authority (KRA) following the mysterious theft of a luxury BMW X5.

The Tax Appeals Tribunal recently dismissed an appeal by Seaways Kenya, which had sought to avoid paying taxes, penalties, and interest related to the stolen vehicle. The firm argued that the 2001 BMW X5, which was on transit to Kampala, Uganda, was stolen at gunpoint along Mombasa Road and that the loss was beyond its control.

Seaways Kenya insisted it was unfair for KRA to demand payment for a vehicle that was never delivered, especially since the theft occurred over two decades ago and was promptly reported to authorities. The company maintained that the Commissioner of Customs and Border Control was fully aware of the incident and should have canceled the transit bond.

However, the tribunal ruled in favor of KRA, stating that the Commissioner acted within the law by declining to cancel the bond. The tribunal, chaired by Christine Muga, affirmed that Seaways Kenya remained liable for the unpaid taxes and penalties associated with the vehicle.

A transit bond serves as a financial guarantee ensuring that customs duties and taxes are secured during the movement of goods through a country. In this case, KRA argued that the company failed to fulfill its obligations under the bond agreement, despite the reported theft.

According to case records, the BMW was cleared from the Port of Mombasa for transit to Uganda in September 2001. The vehicle, however, never reached its destination. Reports indicate that it was stolen at gunpoint soon after leaving Mombasa, with the incident recorded at Embakasi Police Station. Despite efforts by the tracking company, Automated Logistics Services, the vehicle was never recovered.

The ruling now compels Seaways Kenya to settle the taxes and accrued penalties, marking a significant blow to the logistics company and its director, Babu Joshua, who now faces mounting scrutiny over the firm’s operations and compliance record.